A Silicon Valley community bank has introduced a credit card that can only be applied for over the Internet.

NextCard Visa, which Heritage Bank of Commerce is issuing for a start-up technology company called Internet Access Financial Corp., is being touted as the "first true Internet Visa."

Customers are sent standard pieces of plastic and monthly bills, but they are encouraged to conduct their business and view their statements on- line.

"We believe this is one of the real advances in the use of the Internet for consumer banking," said Jeremy Lent, chief executive officer of Internet Access, the two-year-old San Francisco company that developed the concept.

It is the first credit card that $264 million-asset Heritage Bank has issued. "We have a strategic interest in the Internet as a way of doing business for the future," said Ken Silveira, the Santa Clara-based institution's executive vice president of operations and administration.

Though NextCard works like a regular credit card, it has several features its creators call unusual. One is an instant response to each application: A Web surfer can fill out three screens of information- including Social Security number, annual income, and mother's maiden name- and get an answer in under a minute, thanks to communications links to the three major credit bureaus.

Consumers whose applications are approved can select certain terms of their cards-perhaps the interest rate or size of credit line-depending on their credit profile.

"They might want to transfer a number of balances to our account, and that might enable them to get a better line of credit or a lower rate," Mr. Lent said.

Electronic commerce analysts questioned the need for NextCard, saying that many established credit card issuers accept on-line applications. Also, consumers might be reluctant to add a new card or switch from an old one, particularly if they had already accumulated incentive rewards.

David E. Weisman, an analyst at Forrester Research in Cambridge, Mass., called the on-line application feature a "limitation." "All they've done is limit themselves to only one channel, rather than taking advantage of any of the other application channels" like branches, telephones, and mail.

Cliff Condon, another Forrester analyst, called NextCard's technology "interesting" and "significant." He said real-time approvals of applications and instantaneous authorizations of balance transfers from other cards are breakthroughs.

While the Internet could lower account-acquisition costs, Mr. Condon said he doubted NextCard could establish a brand and build market share by itself. He said the developer might do better by licensing its software to larger card issuers and other companies that want to encourage on-line transactions.

Scott Smith, an analyst at Current Analysis in Sterling, Va., said some consumers might not feel comfortable submitting via the Internet the sensitive information asked for in the application. A hacker who tampered with the NextCard site and gained access to a completed application would have enough information to steal the applicant's identity.

"The application on-line seems more a burden than a benefit," Mr. Smith said. "Convenience is canceled out by the fear of putting that much information about yourself on-line."

Mr. Lent said security should not be a concern. NextCard offers customers a "100% safe Internet purchase guarantee." This means his company will insure any losses.

"We can't stop fraud from occurring, but we're guaranteeing the consumer against their financial loss," Mr. Lent said. "We feel that because we understand the security issues, we can allow other people to relax. We think that will be an important enabler."

The security guarantee is not a new concept. AT&T offers one with its Universal Card, and federal law sets a $50 liability limit on all credit cards.

NextCard relies on the Internet security protocol known as Secure Sockets Layer. Mr. Lent said his firm is evaluating Secure Electronic Transactions, or SET, a more exacting protocol for card payments developed by MasterCard, Visa, and some technology companies. "I'm not yet absolutely convinced as to the direction that SET is going," Mr. Lent said. "Right now, we're comfortable."

NextCard customers can view their card statements on the Internet, and will have access to 16 months of data, Mr. Lent said.

Cardholders can classify purchases by type or download the information into a personal financial management software package.

Mr. Weisman called this a valuable feature, saying few banks have paid attention to credit cards in their on-line banking programs.

NextCard "doesn't seem like something so proprietary that somebody else couldn't do it quite easily," said Mr. Smith. "In the next six to nine months, you'll be able to download credit card information into personal financial managers."

More and more banks are offering Internet access to various account records. Last week, Bank of America announced the addition of on-line credit card access to its home banking package.

NextCard debuted in a pilot stage in December. On Feb. 6 it was offered to the public.

"Our competitive advantage will be based on the fact that we have a 100% Internet focus," Mr. Lent said.

He wants to obtain a thrift charter for his company, so that it can issue the card itself.

Mr. Lent, who founded Internet Access in 1996 with his wife, Molly, was chief financial officer at First Deposit Corp.-now Providian Financial Corp.-until early 1995. Until 1989, he was a credit card consultant for Strategic Planning Associates, which became Mercer Management Consulting.

Answering those who doubt whether a start-up like this can succeed, Mr. Lent recalled that "back in the late 1980s people asked why monoline credit card companies would ever be successful advertising cards through direct mail, when the large banks could swamp the start-ups. They capitalized on a channel and worked hard."

Neither the bank nor Mr. Lent are saying how many people signed up for NextCard. Mr. Silveira said enhancements are in the works. For example, customers might be able to add custom designs to the plastic, like "a picture of your hobby or something that you could e-mail to the NextCard department."

Heritage itself does not yet offer Internet banking, but it has high hopes for NextCard. Mr. Silveira called it potentially "a killer application."

"We're a business bank and our business clients have electronic banking services," Mr. Silveira said. "Our customers are saying they believe this is important, and they want it available to them."

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